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Lawmaker Introduces Important Pandemic Risk Insurance Act

It aims to create a federal backstop for financial losses related to future catastrophes

The Ohio Society of Association Professionals (OSAP) is excited to share information we recently received from the American Society of Association Executives (ASAE). Yesterday, Congresswoman Carolyn Maloney (D-N.Y.) reintroduced the Pandemic Risk Insurance Act (PRIA) to establish a federal backstop for financial losses due to a future pandemic or public health emergency.

As you may recall, passing a PRIA-style program has been a top ASAE priority since March 2020; they are pleased to support Rep. Maloney’s new bill. Important for our community, PRIA includes event cancellation coverage, along with business interruption and other lines of coverage, to help navigate pandemics and public health emergencies.

What’s in the Bill

Several provisions in PRIA 2021 differ from last year’s bill. While the government would still absorb 95 percent of claims in the future, business interruption coverage would change to a model known as “parametric.” This new model is similar to coverage offered by the Paycheck Protection Program (PPP). But, instead of receiving a loan or grant, policyholders would pay a premium for access to expedited funds that cover up to six months of eligible fixed costs, such as salaries and mortgage.

Other notable changes in PRIA 2021 include:

  • Insurers would be required to provide coverage;
  • The $750 billion total-loss cap from the first bill was removed; and
  • Insurers would be required to offer pandemic coverage for event cancellation, among other lines of coverage, if they provide beneficiaries event cancellation coverage for other perils.

There is plenty more to unpack in this important legislation; if you have questions, please don't hesitate to contact ASAE public policy staff with your questions.  email us with questions.

Please select this link to read the full bill, as it was introduced.

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